A highly desirable foodie culture, an unemployment rate that is consistently well below the national average, and a property market that has been so consistent that the median house price has only declined once over the past two decades.
No, it’s not somewhere within Sydney or Melbourne; it’s actually a regional location!
The claim to fame for being one of Australia’s most consistent property markets is the vibrant New South Wales regional city of Orange.
Once upon a time, Orange was most well-known because of its unique name. Contrary to popular opinion, oranges are not grown there because its climate is too cool. Just in case you were wondering, its name has more to do with the Principality of Orange, in southern France, from way back in the 1820s.
Fast forward nearly 200 years and ‘The City of Colour’ has become one of Australia’s regional stars due to its embarrassment of economic attributes.
Orange is the home of one of Australia’s premier gastronomic festivals – Food Week. Increasingly recognised as one of Australia’s premier wine growing regions and with an abundance of gourmet restaurants and tantalising cafes, it also offers culinary and wine delights year-round.
Yet so many capital city folk question why do people want to live in regional Australia where the air is cleaner, the commute to work is 10 minutes, the community are super friendly, schools are great, and the cost of a good quality house fits comfortably within the household budget. Hmm.
Diverse and developing
Today, Orange is home to some 42,000 people, making it Australia’s 56th largest city. Its population is growing at comparable rates to bigger profile cities like Adelaide, Hobart, the NSW Central Coast, and Newcastle.
It is located just 250 kilometres west of Sydney, which means it’s only a short one-hour flight to get to Australia’s economic engine room from Orange airport.
Its airport actually underwent a recent upgrade to accommodate increasing demand which last year saw an all-time record of 70,364 passengers through its doors.
People don’t just jump on planes for practice. Whether attracted there for holidays (to spend money) or to do business (to make money), either way it’s great for an economy.
Like many other strong regional cities, Orange services an area much larger than its boundaries, with it being an essential economic hub for about 180,000 people living in the Central West. Orange fits the description of what Propertyology call a mini capital city or satellite city.
While agriculture, especially stone-fruit, is important to its economy, it’s not the only economic string to its bow.
In fact, health is the biggest employer. Over recent years, there’s been substantial investment in developing a world class hospital and associated medical speciality precincts, creating a boom in health-related employment opportunities.
Education, retail, manufacturing and mining are other important industries for the Orange economy. As an economic profile, that is actually more diverse than a few capital cities.
Newcrest Mining’s Cadia gold mine is located just outside of Orange and is one of the largest known gold reserves in the world.
Right up until the factory closure in 2016, most Australian households had a fridge, washing machine or a dryer that was manufactured in the Electrolux plant in Orange. When first announced in 2013 that the city’s biggest employer had surrendered to cheaper offshore labour and would close the doors, there was understandable concern. But, with the benefit of hindsight, it’s made the community stronger.
That is borne out by its unemployment rate, which has consistently been equal to, or better than, the national average for a decade or more. In March 2018, it was 3.8 per cent.
Consistent and affordable
As well as its solid economy, Orange is attractive to many because of the superior lifestyle it offers its residents.
There are plenty of people who set out planning a 2 to 4-year relocation to Orange to study at its Charles Sturt university or to gain valuable experience working at the world-class hospital and subsequently opt to never leave.
With a median house price of just $400,000 you get a big bang for your buck in Orange.
Over the past 20 years, property price growth has averaged 6.6 per cent per annum and its median house price has only declined once in that period – and that was a miniscule 0.4 per cent in 2015 [amidst the Electrolux closure].
The thing is, while it has one of the coolest town names in the country (which also happens to reflect the colour of the Propertyology brand), just because it is regional doesn’t mean it hasn’t posted strong price growth over the years, too.
Sydney might have hogged all the limelight over recent years, but regional cities also have booms from time to time. In 2003, the median house price in Orange increased by an impressive 31.3 per cent, which eclipsed the Harbour City’s best-ever year of 22.9 per cent in 2002.
Its consistent market also saw it post price gains in 2011 and 2012, a time when all eight capital cities recorded price declines.
Propertyology has invested in Orange and our clients will have enjoyed the 11.2 per cent price growth over the year ending September 2018. That’s better than 7 out of 8 capital cities and during a period when Sydney prices dropped 8 per cent.
One might say that the Orange median house price is currently red-hot (sorry, I couldn’t help myself). That growth doesn’t look like dissipating anytime soon.
And, where as a typical investment property in Sydney today costs circa $25,000 per year to hold, in Orange it’s more like $2,500.
If you ask me, investing in Orange is nothing like a traffic light that recommends you should proceed with caution or slow down.
With fundamentals that include a great lifestyle, affordable housing, and a diverse economy, there’s no reason to think that it won’t continue to be one of Australia’s most consistent and reliable investment locations in to the future.
When it comes to thinking about investing in a location outside of a capital city, the minds of many often get filled with negative perceptions such as weak population growth, very few jobs, an undesirable lifestyle, and poor investment performance. For a large number of regional locations across Australia, including Orange, those perceptions couldn’t be further from the truth.
As with every location in Australia, there will always be better times and not so good times to invest.
The moral of the story is to understand that personal perceptions are not helpful when it comes to making a sensible property investment decision. One needs to take an objective look at proper fundamentals of each location in Australia.
Below is a small sample of charts that Propertyology has pulled together to illustrate the soundness of Orange’s investment fundamentals.
Propertyology helps everyday people to invest in strategically-chosen locations all over Australia. Testament to our multi-award-winning success is Propertyology’s expertise in being the only company in Australia to forecast Hobart’s remarkable resurgence and begin investing there in mid-2014, before the boom. Now, while others fight like seagulls over a chip to get in to that market, our buyer’s agents are actively investing in a few other locations that resemble what Hobart looked like in 2014. Like to know more? Contact us here.